Okta Reports Strong Q4 & FY26 Results, Guides for Continued Profitability in FY27
Summary
Okta, Inc. announced strong Q4 and full fiscal year 2026 financial results, including a significant turnaround in GAAP net income, and provided fiscal year 2027 guidance projecting continued profitability and cash flow.
Key Events
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Strong Q4 and FY26 Financial Performance
Okta reported Q4 FY26 total revenue of $761 million, an 11% increase year-over-year, and full-year FY26 total revenue of $2.919 billion, up 12% year-over-year. GAAP net income for FY26 significantly improved to $235 million, compared to $28 million in FY25, marking a substantial turnaround in profitability.
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Positive FY27 Financial Guidance
For fiscal year 2027, the company expects total revenue between $3.170 billion and $3.190 billion, representing 9% year-over-year growth. Non-GAAP diluted net income per share is projected to be $3.74 to $3.82, with non-GAAP operating margins of 25% to 26%.
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Robust Cash Flow Generation
Okta generated $863 million in free cash flow for fiscal year 2026, an increase from $730 million in FY25, demonstrating strong operational cash generation. The company expects to continue generating significant free cash flow in FY27, with guidance of $850 million to $880 million.
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Non-GAAP Tax Rate Reduction
Effective February 1, 2026, Okta adopted a long-term projected non-GAAP tax rate of 21%, reduced from the previous rate of 26%, primarily due to the enactment of the One Big Beautiful Bill Act, which is expected to positively impact future non-GAAP earnings.
Analysis
Okta's 8-K filing details robust financial performance for Q4 and full fiscal year 2026, marked by significant improvements in GAAP profitability and strong free cash flow. While the fiscal year 2027 revenue guidance indicates a moderation in growth compared to the prior year, the company projects continued expansion in non-GAAP operating margins and diluted EPS. The reduction in the non-GAAP tax rate is also a positive factor for future earnings. This comprehensive financial update provides investors with a clear picture of the company's improving operational efficiency and cash generation, despite a slight deceleration in top-line growth.
At the time of this filing, OKTA was trading at $72.99 on NASDAQ in the Technology sector, with a market capitalization of approximately $12.7B. The 52-week trading range was $68.77 to $127.57. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.